CAIRO: After months of criticism over their actions in the Gulf of Mexico, BP appears to have found a new investment home: North Africa. After reports earlier this month of a deal with the Libyan government to allow Mediterranean exploration, the British oil and gas giant has signed a new agreement with the Egyptian government that will allow them to develop significant gas resources. The deal signed Monday in Egypt aims to tackle two deepwater blocks in the country and despite criticism, BP is hopeful of a new start in North Africa. “BP and the Egyptian General Petroleum Corp. have a long-standing and successful partnership, and the agreement we signed today takes that to a new level in developing these deepwater resources, as well as creating an important source of future growth for BP,” said BP Chief Executive Tony Hayward. “Production from the West Nile Delta development is projected to reach up to one billion cubic feet per day, providing a major new source of gas for the domestic market in Egypt,” said BP in a statement. The same statement said that BP will use subsea infrastructure and a new purpose-built onshore gas plant on Egypt's Mediterranean coast to develop the fields, BP said. Gas is expected in late 2014. The deal is positive for BP as it struggles to rebuild its reputation, said NCB Stockbrokers analyst Peter Hutton in statements to the Wall Street Journal. “It shows it's business as normal elsewhere in the world and other areas are still signing them to do deepwater,” he said. The authorities in Libya, BP's other core area of operation in North Africa, have also voiced support for the company, he said. BP has been in Egypt for almost 50 years and fields it operates supply 35% of domestic gas demand. BP is the largest single foreign investor in Egypt. However, not everyone is convinced over the optimism of allowing BP to enter Egypt. A government official with the country's Environmental Action Agency (EEAA) said that he believes giving BP the deal shows that Egypt is in a bind that gives companies with a bad track record to continue to increase their work. “We have seen that BP and other oil companies do not adhere to regulations and requests from governments,” the official, who asked not to be named due to security concerns. “Look at the Gulf of Mexico. That is horrific and here in Egypt we also struggle with oil spills on a daily basis, so giving BP this new deal is a sign that the government doesn't care about the future of Egypt's marine life and eco-systems.” But, despite the official's protest, BP is ready to continue to push forward on its North African projects, here in Egypt and in Libya. BM
